Market Report

Cautious return exports
 

NL-Tilburg, July 5th 2020 

It indeed looks like exports of recovered paper have seen an impulse from the price reductions in Europe. This last week buyers from China, India, Indonesia and Turkey have shown up. Volumes sought after are probably not going to save our market, but especially the high China price, mainly offered in the U.K., was remarkable. The extra quality and inspection requirements, also for Indonesia, indeed make a bonus on the price necessary, but how much should that be ? And certainly In a buyer’s market ? But also orders from India indicate that we can now offer better than our American counterparts. And with the low transport costs to Turkey, offers from the U.S. have no chance to compete with us.  But everything in low grades is still plenty available. If that will change depends on volumes collected in the coming months and the restart of the economy which is linked to that. The first information about that for example in the U.S.A. does not look bad at all, but we have to wonder if the published data of entrepreneurs and consumer’s confidence as well as reducing unemployment are reliable. Daily now we see a lot on announced redundancies in the headlines. It means we will have to bend with the opportunities available and be alert. Now with lower grades going down further we again are faced to re-introduce charging costs to sources. We more or less had this gone through at the beginning of the year but only two months of a recovered paper hype and we have thrown it all out of the window again.  With price reductions of € 15 to sometimes ¤ 30 or more for packaging grades we have little choice, however. Lower deinking grades have been reduced significantly also here and there, but middle and high grades are still keeping up well.  After the dramatic decrease in newspapers and magazines sales in corona time we have to see if we will ever get back to the pre-corona sales. Already sales of graphic paper went down structurally with 8-10% worldwide. How will it look in times to come ? The French government tries to help out at least by offering a € 50 tax reduction on subscriptions on newspaper and magazines with general or political content. Seeing a reduction of 0.6% in 2019 in demand in France for packaging paper, a similar stimulus perhaps could be found for packaging ? Not that it has hit the French paper industry in any form as 15 % more was exported. However interesting for us to find out is if we perhaps might be underway to a general reduction in consumption of paper and board. That would lead to a shrinking recovered paper sector. In the pulp sector there is no sign of that yet. That market saw a 2% growth worldwide in 2019, thanks to increasing imports into China and other Asian countries which on the other hand were partly belabored by a decrease of pulp sales to the graphic paper industry in the U.S. and Europa.         

 

Price indication

Price indications in Europe for low grades of recovered paper, sorted, baled and ex-works are now between € 40 and € 150 per ton. These prices are depending on quality, available volume, region and loaded weight.
Click here for the price chart, with prices of the last 10 years.
The price chart gives an indication of the price of mixed paper in the Netherlands free delivered mill over the last years.  Scrolling over the top of the colums gives the exact price indication in Euro's per ton.
To view the price chart completely, please click and hold on the price chart after opening and move cursor to left or right to see all available years/months


China imports

In the first Quarter of 2020 a total of 1.367.000 tonnes of recovered paper was imported into China. That has half of the volume compared to the same period last year. Reason could be the coronavirus. The Chinese paper and board industry produced 12% less compared to the 1st Quarter of 2019 and several ports were closed down which made import more difficult. The imported 1,367 million tons however is not that much different than was foreseen. China was supposed to import 6 million tonnes of recovered paper in 2020, an average of 1,5 million ton per Quarter.
Remarkable however are the reductions in purchases per region. Hardly anything is bought anymore in Europe, the US are still by far the biggest supplier and also Japan remains an important supplier just like other countries in Asia.  Here the imported volumes per region in the first Quarter with the reductions in percentage compared to the same period last year:

VS                  766.000 t       -28%               Azie (zonder Japan)   167.000 t     - 45%   

Europa            60.000 t       -92%                Zuid Amerika                  6.000 t      - 80%

Japan            256.000 t      - 30%                Oceanie                         45.000 t      - 66%

                                                                        Andere                          43.000 t      - 44%

Imports into China of raw material for the paper industry

Raw material      2   019 in tonnes     2018 in tonnes          difference
recovered paper       10.356.508        17.171.076             min 6.814.568
recycled pulp                948.514             325.978             plus    622.536
virgin pulp               27.195.870         25.352.159             plus 1.843.711

Totals                      38.500.892         42.849.213            min  4.348.321 
In the year 2017 China imported 20.968.400 tonne sof recovered paper oud paper.

Total import licenses recovered paper issued in China
2018 :             18.251.651  tonnes
2019 :             10.796.727  tonnes
2020 so far :   4.482.000  tonnes